South Koreans will soon allow its citizens to use blockchain-powered, fully decentralized digital IDs instead of traditional physical cards by 2024.
By 2024, South Korea plans to offer blockchain-powered digital IDs to its citizens in the country’s efforts to boost economic growth by reaching out to a tech-savvy population. The objective is to get 45 million people to adopt this plan within two years.
Under the plan, the government will require blockchain-powered, fully decentralized digital IDs instead of physical ID cards. It means the government will not be able to see how or when citizens use the IDs as it further opens its arms to blockchain technology.
Digital IDs for South Koreans
The South Korean government announced its plans to transition to digital IDs on October 17. According to the announcement, the IDs will be embedded as an app within mobile devices and will work similarly to physical resident registration cards.
South Korea plans to roll out blockchain-powered digital IDs for citizens using smartphones by 2024, to simplify online verification without the need to take pictures of certificates or codes. Instead, verification will be sent via text. The country hopes for a full rollout by 2024, with 45 million citizens adopting the technology.
South Korea’s plans for digital IDs would see the government adopting a decentralized identity system, which means the government will not be able to access information embedded in an individual’s mobile phone. These include details about whose digital ID is used, how it is used, and where it is used since the system will wholly rely on decentralized identity.
Digital IDs and the Economy
One of the latest emerging technologies underpinning the digital economy is smartphone-implanted digital IDs. It isn’t a novel concept to a tech-savvy nation as South Korea since the country ranks first among all nations in applying technology to life, business, and government, according to the Portulans Institute, an American think-tank.
And with more people working from home these days and making cashless payments, this technology has nowhere to go but expand its reach.
Hwang Seogwon, an economist at Korea’s Science and Technology Policy Institute, said citizens could use the proposed digital IDs in finance, healthcare, taxes, and transportation. On the other hand, Suh Bo Ram, director-general of the country’s Digital Government Bureau, said this innovative technology could help businesses that haven’t fully transitioned online yet.
It wouldn’t be the first time South Korea implemented a blockchain-based digital ID solution. In August 2020, more than 1 million South Koreans adopted blockchain-powered driver’s licenses operating via Korea’s PASS smartphone app.
Then, in September 2020, the Korea Internet & Security Agency (KISA), a South Korean government agency, began pilot-testing a similar system. Other nations are expected to follow South Korea’s lead soon as they see the country leading the way in all things blockchain and Metaverse-related. A study conducted by market research firm ReportLinker in June 2021 estimates that digital IDs will grow a further $3.58 billion by 2025, translating to a compounded annual growth rate of 71%.
Incidentally, the head of the Korea Digital Regulatory Authority said that this digital ID program would see South Korea gaining at least $42 billion in economic value within a decade, equivalent to 3% of Korea’s GDP.
Still, a blockchain adviser and CEO of Bundlesbets.com, Brenda Gentry, said in an interview that government authorities or corporations would still need to recognize the digital ID management system first, no matter how capable and decentralized it is.
“If the issuing authorities don’t recognize the validity of the blockchain IDs, then the same cannot be used for availing a majority of public services. This, in my opinion, is the biggest limitation.”
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